Guidelines on the Use of Pag-IBIG Fund's Conversion/Transfer Facility and Implementation of the BIR RMO No. 28-2016

January 23, 1996 BIR RULING [UN-031-96] Carlos A. Lardizabal, Esq. 3302 Pacific Coast Highway Malibu, California 90265, U.S.A. S i r : This refers to your letter dated November 28, 1995 requesting for a ruling as to the taxability of the transfer of title to real properties situated in the Philippines by Mayumi Ruth Pascual, M. D. in favor of the trustee of a revocable inter vivos trust. It is represented that Mayumi Ruth Pascual has established a revocable inter vivos trust and would like to change the manner of holding title to all her real properties and stocks and securities from: Mayumi R. Pascual to: MAYUMI R. PASCUAL, Trustee (and subsequent trustee), CORONET TRUST. In reply, please be informed that under Section 21(e) of the Tax Code, as amended, capital gains presumed to have been realized from the sale, exchange or other disposition of real property located in the Philippines classified as capital assets, including pacto de retro sales or other forms of conditional sales, by individuals, including estates and trust shall be taxed at the rate of 5% based on the gross selling price whichever is higher. Such being the case, and considering that there is no actual transfer of ownership over the aforementioned properties, as a result of the transfer of the properties to the trustee, the said transfer is not subject to the 5% capital gains tax under Section 21(e) of the Tax Code, as amended. Moreover, the deed conveying the aforementioned properties to the trustee is not subject to documentary stamp tax. The aforementioned real property may now be registered by the Registry of Deeds concerned in the name of the trustee. This ruling is being issued on the basis of the foregoing facts as represented. However, if it will be disclosed upon investigation that the facts are different, then this ruling shall be considered null and void. (BIR Ruling No. 086-92 dated March 19, 1992) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: ALICIA L. TOMACRUZ Head Revenue Executive Assistant/Director (Legal Service)